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Generation Rent: The Young Key Workers Locked Out Of Home Ownership

Generation Rent: The Young Key Workers Locked Out Of Home Ownership

Young key workers have found themselves locked out of the housing market

7 min read

Years of rising prices and pay freezes have kept generation rent off the property ladder. And despite their heroic efforts during the pandemic, low-paid key workers say they now feel abandoned to the vagaries of a ‘shambolic’ housing market.

Having stepped up to serve on the frontline during the pandemic, young key workers have found themselves locked out of a housing market which they increasingly feel is stacked against them.

“I’m living with my family, as a teacher in north-west London. I can’t afford to rent where I work unless it is shared housing and I don’t feel comfortable with that in light of the pandemic,” Sophie Hudson, a history teacher, tells The House.

“The rent for a one bed around here is about £1,200 and my take-home is under £2,000. By living at home, I have saved up a deposit, but can’t buy as my salary is not enough to [get a mortgage] for anything more than a garage here.”

Trapped in a cycle of ever-increasing rents and soaring house prices, swathes of nurses, care workers, teachers and police officers at the start of their careers now feel abandoned by those who, just months ago, took to their doorsteps to clap the heroism which kept us going through the worst of times.

As victims of generation rent, young public sector workers have for decades faced difficulties in finding their way on to the housing ladder, but it is a problem that has become amplified by the impacts of Covid.

While wages remained frozen, a stamp duty holiday aimed at keeping the housing market moving pushed prices higher, shattering the dreams of those who had hoped the nightmare of the pandemic would bring fresh impetus to unlock the housing market.

In March 2021, analysis from The Guardian laid out the scale of the problem. Low-paid key workers, including care staff, would be unable to afford an average priced home in 98 per cent of the country, while nurses on a median wage of £33,920 applying for a 90 per cent mortgage would be unable to raise enough funds to buy a home in almost 75 per cent of local authoritiesThe challenge is particularly acute for key workers in the capital. Even those early in their careers and fortunate enough  to be able to be able to save money while staying home with their parents are finding stagnant wages make it impossible to catch up with London’s escalating house prices.

In an attempt to remedy the situation, in June then-housing secretary Robert Jenrick announced a government scheme which would “lock-in” 30 per cent discounts on homes for first-time buyers, with councils given the ability to prioritise frontline workers. But Hudson says government schemes did little to help those working in the most expensive parts of the country, leaving them stuck in a “shambolic” housing market.

“The schemes to help buyers are all based on cutting deposits, but when I started the process of buying a flat I was having to borrow money from my parents to get a 40 per cent deposit in order to be able to purchase,” she says.

“That flat fell through and the fact I cannot get a mortgage despite having a relatively good salary is insane. If I was living in some other parts of the country I could buy a three-bed house on my salary, but in north-west London I’m stuck.”

Education Support, a charity which provides a helpline and financial grants to teachers, tells The House its latest analysis shows these problems are having an increasing impact on the profession, with the number citing housing as the primary reason for poor mental health doubling in the last year.

A snapshot of the difficulties came in October 2021, when London bus driver Anthony Brathwaite hit the headlines after he was left facing eviction from temporary accommodation when Lewisham Council concluded he was not eligible for council housing and had made himself “voluntarily” homeless.

Having offered Brathwaite and his two children a one-bed flat outside the borough and another with a rental price of £1,300 – more than his budget – he resisted the eviction with help from local activists and a renters’ union. When the bailiffs called in the police to help handle the situation, one officer admitted he understood the bus driver’s plight, shocking onlookers by telling them he “knew how expensive it is to live in London, which is why I can’t afford to do it any more”.

Dan Wilson Craw, deputy director of campaign group Generation Rent, says the case encapsulates the risk of pricing key workers out of the communities in which they work. There is an argument for targeting low-cost home ownership at this group, he says.

“Everywhere needs nurses, teachers and police officers, and if those people can’t afford to settle down where they currently are, they have skills they could take to other parts of the country. So, you do need to make sure you’re accommodating those people,” he says.While some key workers struggle to get their foot on the first rung of the housing ladder, others are trapped in poor rental properties. Isla, a 24-year-old care worker in east London, who worked throughout the early months of the pandemic, told The House that living in shared housing with her boyfriend and two other couples had made 2020 “even more brutal” to handle.

“We just had no space of our own apart from our small bedroom. It hurts, and I feel used. All the talk about us being so important has been forgotten already. I’m not asking for special treatment; I just want a fair chance to be able to do my job and be able to afford more than a single bedroom. I’d love to have kids someday soon, but it just feels like an impossible dream. I think we will have to leave London to have any chance.”

Wilson Craw said the squeeze on wages for public sector workers and graduate jobs has led to an increasingly “oppressive” housing market which leaves many paying the majority of their take-home pay towards insecure tenancies.

“People starting out in their careers have been hit by pay freezes and face rising rents, and they are unable to move into a home they can live in by themselves or settle down with a partner and a family,” he says. “The cost of monthly outgoings on rent makes it very, very difficult to move on to the next level.”

Isla, who witnessed some of the worst of the pandemic, says she now felt “abandoned” by those who had just months ago told her and her colleagues they were some of the most important people in the country.

“We all knew this is what would happen and that we’d be abandoned again,” she says. “They needed us to step up when everything was bad and now it’s all back to how it was before. We all worked hard, we saw some really sad things, and all we want is the chance to have a place we can call home. That doesn’t seem too extreme to me.”

A spokesperson for the Department for Levelling Up, Housing and Communities said: “We recognise key workers’ immense contribution and are helping them own their own homes with priority access to our First Homes scheme, which provides a discount of at least 30 per cent from full market value.

“Since 2010, we’ve supported over 700,000 households into ownership through Shared Ownership and Help to Buy and we’re investing over £12 billion in affordable homes over the next five years.”

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